Teradyne (TER) Stock Trades Down, Here Is Why

Kayode Omotosho /
2024/01/31 10:55 am EST

What Happened:

Shares of semiconductor testing company Teradyne (NASDAQ:TER) fell 10% in the pre-market session after the company reported fourth-quarter results, with revenue coming in below Wall Street's expectations. Also, the company's revenue and EPS guidance for next quarter both missed analysts' expectations by a large amount. Management explained this, saying, "Looking into the new year (2024), we expect low tester utilization will impact demand in the first half of the year." Though, demand is expected to pick up incrementally in the rest of the year. Overall, this was a mixed quarter for Teradyne, with guidance that was particularly bad.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Teradyne? Access our full analysis report here, it's free.

What is the market telling us:

Teradyne's shares are quite volatile and over the last year have had 4 moves greater than 5%. But moves this big are very rare even for Teradyne and that is indicating to us that this news had a significant impact on the market's perception of the business.

Teradyne is down 8.8% since the beginning of the year, and at $95.44 per share it is trading 18.6% below its 52-week high of $117.23 from July 2023. Investors who bought $1,000 worth of Teradyne's shares 5 years ago would now be looking at an investment worth $2,655.

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